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CFIB ranks Whistler second-worst for municipal spending

Mayor says statistics "meaningless" for community

The Canadian Federation of Independent Business (CFIB) released its fourth annual B.C. Municipal Spending Watch report this week, and according to their metrics Whistler is second worst in the province when it comes to municipal spending growth.

The report compares the spending growth in over 150 municipalities across B.C. to their population growth from 2000 to 2009, while also looking at the change in per capita spending. Communities are ranked by size and by region as well as overall, and there is a separate table in this year's report for vacation and destination regions where the permanent population doesn't reflect the need for services because of second homeowners and visitors.

The report also tracks how much a family of four might have saved in that time period if budget increases were tied to the rate of inflation and population growth.

Provincially, the CFIB report shows that operating spending, adjusted for inflation, increased 46 per cent from 2000 to 2009 while population increased just 12 per cent. In 2009, total municipal spending reached $4.4 billion, up $339 from 2008. All figures are in 2000 dollars.

Whistler saw its population grow 11 per cent in that 10-year period, while the community's operating spending increased 86 per cent. Per capita spending growth was 68 per cent, and in 2009 the municipality spent $6,306 per capita - the highest outlay by any community, though the report acknowledged that Olympic costs were at least partly responsible.

"Although high spending growth can be partially attributed to the preparation for the 2010 Olympics, there is evidence that Whistler has been on a steady spending spree since 2000."

CFIB also reported that a family of four in Whistler could have saved $36,663 if spending had been tied to inflation.

Only Lytton fared worse than Whistler under the CFIB's microscope. From 2000 to 2009 Lytton's population decreased 29 per cent, while operating spending increased 85 per cent.  Per capita spending growth was 161 per cent, and per capita spending is $4,826. A family of four could have saved $42,175 by tying increases to inflation.

Compared to other resorts, Whistler also had issues. Tofino saw its population grow 24 per cent from 2000 to 2009, while operating spending rose 100 per cent. Per capita spending growth was 61 per cent. While spending growth was higher than Whistler, per capita spending was $2,039.

Mayor Ken Melamed addressed the report in a conference call with media on Tuesday, and said their response has not changed since last year. "We observed that the CFIB report is actually meaningless in the Whistler context because Whistler is such a unique resort community, it's the only resort community of its kind in Canada."

For example, Melamed said that there were a disproportionate number of commercial beds - 60,000 bed units in total compared to roughly 10,000 permanent residents - in the resort. As well, Whistler is one of the few ski resorts in the world that hosts more than two million skier visit per year.

As a result, our infrastructure requirements for things like recreation, sewage, water and waste are far higher than our population. But while our costs are high, Melamed said that roughly $10 million of the $77 million budget is funded through the hotel tax, which helps to fund facilities that a town of 10,000 could never afford.

Melamed said the average daily population of the resort is between 25,000 and 27,000, including residents, seasonal workers, second homeowners and visitors.

Although 2000-2001 is credited as being one of Whistler's biggest seasons, Melamed said the number of municipal responsibilities grew significantly over the next 10 years.

"Remember, since 2000 we've added the library, more roads, more trails, two subdivisions, an expansion of the gym at Meadow Park - the list really goes on."

As for why spending is growing faster than inflation and the population, Melamed had a few explanations. One is the fact that resort inflation is different from national inflation, as there are municipal costs you won't find in other communities. Another is a decision that was made in 2008 to raise taxes above inflation for three years.

"When we did our three-year plan in 2008, we looked into the future to try and understand the budget pressures coming down the pipe," he said.

One factor was the need to increase municipal reserves, which were depleted as a result of municipal hall and council keeping property tax increases to inflation for so many years. Another was the labour contract before the Games, where municipal salaries were raised alongside the salaries of unionized workers following a strike action. As a result, municipal wages were to increase five per cent for two years and four per cent in year three. "Obviously we needed to model that into the budget and forecast those additional costs," said Melamed.

The third factor was the province moving tourist accommodation zoning from Class 6 to a mixed class that reduced municipal tax revenues by roughly $2.2 million per year.

With the Games coming, Melamed said they made a decision that they would maintain services at a level to serve the resort at maximum capacity.

However, while taxes have been increasing, Melamed said the goal moving forward is to keep costs and taxes down in the resort. He pointed to another CPI report that suggested the resort is actually doing a good job at keeping commercial tax rates in line with residential tax rates, with a lower ratio - 3.5 to one - than other jurisdictions.

Shachi Kurl, the director of provincial affairs for the CFIB, said it's up to the communities to interpret the data in the report.

"It is really up to the people who live and work in Whistler year-round to ask the question, 'do I feel I'm getting the best value for the tax dollars I'm paying,' and for business owners to ask if they're getting the best value for their licences and other fees that they're paying," she said.

"The year-round population growth has gone up 11 per cent and the real operating spending growth is up 86 per cent. Adjusted for inflation, the real operating spending growth per capita is up 68 per cent. So you really have to go and stop someone on the street and ask, 'do you feel you're getting 68 per cent more services?' If they say yes and they're happy with it, so be it. If not there are some questions to be asked around that."

Kurl acknowledged that numbers for resort communities differ from traditional communities, and especially in Whistler in the run-up to the Games. "It will be interesting to see what happens after the Games, and whether things are going to keep going up," she said.

Another question she said the community should answer is whether there has been enough of an increase in visitor numbers to justify the increase in operating spending.  "We know that spending drives taxes," said Kurl.

In addition to spending, the CFIB looked at other factors like municipal revenue sources.

Some of the CFIB's other findings include:

• Funding transfers to local governments from other levels of government have more than tripled from 2000 to 2009, rising to 214 per cent.

• Municipalities doubled revenues from sources that include fees for parking and recreation to business licenses.

• Vacation and destination communities are among the highest spenders.

• In communities where the population is shrinking, local governments are spending more.

"It's a wake-up call to taxpayers," wrote the CFIB. "It's time to demand more accountability from municipal governments."